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Why do firms enter international mergers or joint ventures?
To enter foreign markets more easily, especially if they lack local knowledge.
Joint Venture
A legal agreement where two or more firms collaborate on a project as a separate entity, sharing profits and equity.
Global Merger
When firms in different countries combine into a single business, often forming multinational corporations (MNCs).
Takeover
When one business buys most or all of another firm's shares to gain control.
How do mergers and joint ventures help spread risk?
They reduce costly mistakes from unfamiliar markets and limit the impact of economic downturns by diversifying operations.
How do firms benefit from market access?
They gain new customers, enter trading blocs without tariffs, and access restricted markets like China.
Why do firms expand into emerging markets?
Slow-growing firms in developed countries seek higher growth potential in emerging economies.
How do mergers secure resources?
They ensure access to raw materials, land, and labor or improve supply chain control.
Why do firms seek intellectual property through mergers?
To gain patents, copyrights, or brand names for a competitive advantage.
How can mergers remove competition?
They offer innovation, skilled workers, and R&D advantages.
Why do firms relocate through mergers?
To benefit from lower taxes, reducing costs and increasing efficiency.
How does diversification help firms stay competitive?
Owning multiple products in different markets offsets losses in any single market.
What is an example of a company acquiring intellectual property through a merger?
Google acquired Motorola Mobility in 2012 for $12.5 billion to gain its mobile technology patents, helping protect Android from legal disputes.
